Wednesday, December 22, 2010

If you're anything like me, you've been playing Christmas music since the day after Thanksgiving, and have probably listened to every version of "Baby It's Cold Outside" ever recorded. I really enjoy Christmas music, but after a few weeks of the same 20 songs by the same 30 artists, it gets a little mundane. When I discover a new Christmas song, it's usually cause for much rejoicing and repeated playing. When I was introduced to "Dominick the Italian Christmas Donkey," however, I realized that this song probably isn't ever going to come up on Pandora's "Swingin' Christmas" station.

See, this overly-cheerful children's tune (complete with barnyard sound effects that probably sound more like the real Christmas than anything Elvis ever recorded) is a strange conglomeration of Italian Christmas traditions, Italian words, and Italian pride that is rare west of the Mississippi. It's about a little donkey, named Dominick, who helps Santa deliver gifts ("Because the reindeer cannot, // Climb the hills of Italy" [even though the whole point of flying reindeer is so they're not hindered by any hills]). It's a little bit Rocky-meets-Rudolph, but it works. What caught my ear especially (beyond "hee-haw, hee-haw") was the stanza that goes:

A pair of shoes for Louie

And a dress for Josephine.

The label on the inside says

They're made in Brooklyn.

When I heard that, I actually had to stop and think about why no other songs talked about Santa bringing Brooklyn-manufactured goods to children in Italy. I then realized that our whole American Santa tradition was an economic catastrophe, thanks to its use of elf labor!

When elves at the North Pole make toys for Santa, they theoretically supply the entire Christmas market with goods. In other words, they have a monopoly on toys. Now, monopolies are destructive in the sense that they eliminate competition, which reduces the incentive to create something better (without competition, Lincoln Logs never would have become Legos). So, there's a big initial problem with the whole world suffering from a toy monopoly.

What the song really points out though, when Louis and Josephine in Italy get shoes and a dress from Brooklyn, is the importance of specialization on a global level. Different countries (or regions) have different specialties — in the song, Brooklyn's specialty is children's clothes. Italy's specialty is tenacious donkeys (see chart below for production capabilities).

Brooklyn

Children's Clothes 0 100 300

Tenacious Donkeys 100 50 0

Italy

Children's Clothes 0 50 200

Tenacious Donkeys 200 100 0

If both Brooklyn and Italy try to create both children's clothes and raise tenacious donkeys, the world has 150 units of clothes, and 150 donkeys. The chart shows that Italy has the comparative advantage in donkeys (raising 2 for every 1 Brooklyn raises), and Brooklyn has the comparative advantage in children's clothes (producing 3 for every 2 units Italy produces). If both places specialize and only produce what they're best at (clothes for Brooklyn, donkeys for Italy), the world ends up with 300 units of children's clothes, and 200 donkeys — more of both!

Trade (or in this case, Santa, acting as a kind of jolly "invisible hand") allows nations to specialize, because they no longer have to produce all the goods they want to consume.* Specialization creates more goods overall, which helps reduce scarcity (the chief foe of economics). Trade tariffs (or naughty children) prevent this exchange, reducing everyone's standard of living. In the song, Brooklyn made its own children's clothes, it didn't have to rely on elves. This allowed for specialization that can't be found at one factory at the North Pole (unless individual elves specialize). With free markets and Dominick the Italian Christmas Donkey on my side, I think I can safely advocate the abolition of Santa's elves. It's probably sweatshop labor anyway.

*Careful readers may have noted that at first glance the doctrines of competition and specialization may seem contradictory. A closer inspection, however, reveals that specialization comes about when one country produces what its resources are most conducive to, but it also relies on supply and demand. If everyone in the world had an easy time producing wheat, the world wouldn't produce only wheat because there would be a demand for other products. In a global economy, the potential supply and demand of goods is much more complex than the model. Thus, there may be 15 regions that all produce children's clothes according to specialization, but they can compete amongst each other, creating cheaper, more durable clothing. There's also the possibility of competition within one specialized market. If there are 10 donkey raisers in Italy, they all compete against each other to breed the most tenacious, cheerful donkeys, further increasing Italy's comparative advantage in donkeys.

Sunday, December 19, 2010

Last week, I had a marvelous adventure in, shall we say, vintage casual.

See, every year around Christmastime, NYC reintroduces a few vintage subway cars back into the line, and lucky passengers get to ride on them, taking a trip down memory lane ... er, memory track, as it were. Levys' Unique New York planned ahead for a vintage subway car that would leave from the Lower East Side, head to Queens, and come back, and encouraged New Yorkers to "Party Like It's 1912," by dressing up in period attire, bringing tea and cookies, and listening to live ragtime ... all while riding a jostling, jerking vintage subway car.

My dear roommate agreed to dress up with me (with these sorts of things, it's usually best to bring a friend for two reasons: so you aren't the only person dressed up strangely, and so that if the event is full of crazy people you have some protection), and after church we and another friend grabbed lunch and headed downtown. After some navigational mishaps on my part (shocker), we made it to the party. Hastily hopping on a subway car, we moved through a couple cars looking for classmates and admiring the costumes of people who seemed rather normal, except for owning complete Victorian/pre-WWI-era outfits.

After we found one more friend (a smartly-dressed chap with impeccable core balance), the train finally got moving. The live ragtime band played, the lights flickered off and back on, and couples danced like the Titanic had never sunk. The train was extraordinarily bumpy, so while all this quaint, wonderful stuff was going on, I (and a few others) began stumbling on top of people, who were also stumbling on top of us. Unlike a normal commute, in which needless bumping of strangers gets a death glare at the very least, everyone just chuckled and held on tightly. Our tour guide, a man in a gleaming white suit with one of the most impressive moustaches I've ever seen in person, seemed to be the only one who could (or dared) move through the densely-packed subway car (though the smartly-dressed chap and a few others did manage to simply stand and not fall over).

After a few stops, a series of remarkable things happened. Our mustachioed tour guide and some charitable man began pouring tea (a delicious, spicy herbal blend) into dixie cups and asking us quite properly "one lump or two?" Then a woman came forward with a silver tray of goodies. Then a man passed forward a package of shortbread cookies. It was New York City, on a rainy Sunday afternoon, and there were strangers sharing food with each other in the subway. Truly, it was a miraculous thing. Even as we (and by we, I mean I) fell on top of our newest and closest best friends, everyone smiled. This was partly because the music and jostling made conversation difficult, but partly because it was such a very nice experience. Not everyone dressed for the period, but most had (minus the modern cameras and videocameras and flip phones in use to document the event), and it was delightful.

We made it to the end of the line, hopped off, found more friends, and eventually got back on. It was more of the same, except that the band had moved to the other end of the train, and in order to get to the music, we had to pass through a series of moving vintage subway cars. I mention this only because it was a lifelong dream I didn't know I had — that is, until I was standing there, grabbing the handle of the next car, watching the tracks whoosh by underneath me, and I realized I had waited my whole life to do that. Huzzah!

Where were the economics you ask? Well, beyond the signs advertising $0.12 subway fare (a constant remind of inflation and bygone times), I was struck by how little had really changed in the economics of it all. The women wore ruffles and the men wore hats, but getting dressed up for a party was universal (and something I've been promoting for years). The ride was much bumpier (the MTA has done something right since 1912!), but the subway still got people to their destinations. The ads were quaint and promoted enviable prices, but good music and good food still brings people together, no matter what a gallon of milk costs by comparison. The band played much differently, but couples in love still danced.

At its heart, economics is about the choices people make. Choices like dressing up and riding the subway for a few hours. Choices like buying subway fare. Choices like not putting enough lifeboats onboard the "unsinkable" luxury liner that sank in 1912. Even though many of our choices (and the rational behind them) have changed dramatically, it's nice to know that parties, food, and music still bring people together, be it in 1912 or 2010.